Research On Effect About Executive Compensation Structure To The Effectiveness Of Compensation Sticky Based On State-owned Listed Companies

The enterprise senior managers incentive problem is always the hot spot of theory and practice research, with the deepening of research, people are more and more clearly realizing that based on performance of the salary plays a very significant role to top manager incentive. In recent years Chinese researchers began to continue the abroad research of the executive pay and performance sensitivity asymmetric features, found that executive pay of listed companies in China also has the asymmetric features that pay increased due to sales up significantly higher than pay declined due to sales down, which is called pay sticky. But the researches about whether this kind of salary sticky is reasonable or whether it has incentive effect on the listed company top managers seem poor. Starting from this point, this paper are going to study the relations of the structure of executive compensation, executive salary sticky and the company’s future performance in the state-owned listed companies, expecting the research conclusions have a reference value to both theory and practice field.This paper introduces the background and significance of the topic, and indicates the research scope and methodology at first. Then expounds the study carried out in this field both at home and abroad in detail. Next, the present situation about the performance of the state-owned listed companies and executive compensation is described in the overall situation. The fourth step is proposing the hypothesis based on the theoretical analysis, establishing variables and determining the regression equations. In empirical analysis, this paper chooses Level model, which takes after excluding non-recurring net profit as performance variable, with the performance of the next year measuring the future performance, defines executive pay as the sum of equity pay and monetary pay. First, the study of5044sample companies verifies that pay sticky exists in the state-owned listed companies. Then, the sample companies are divided into four groups in accordance with the equity incentive intensity (the ratio of equity pay in total pay),as to respectively study the relationship on executive pay and corporate performance, which verify the equity incentive intensity can reduce the strength executive pay sticky in the state-owned listed company.Nest, calculate the sample company’s executive pay sticky is calculated to study its relationship with the company’s future performance, as to find they have significant negative correlation. Finally, the study of the relationship between the company’s future performance and executive equity incentive intensity in the year2006-2011found that there is cubic curve,and only within the range of (10.75%.74.64%), the equity incentive intensity can produce positive effects to the future performance. Thus, we suggest that state-owned listed companies improve equity incentive intensity within the range of (10.75%,74.64%),which on the one hand can directly enhances the company’s future performance, on the other hand by reducing executive pay sticky to decrease the damage to the company’s future performance caused by itself.